After Wal-Mart dropped a thermonuclear bomb last week on Wall Street, Jim Cramer has been watching the stock for signs of stabilization. Have things finally started to calm down? Well, not exactly.
"I still see plenty of reverberations. Many traders believe Wal-Mart will cut food margins to ribbons, hurting competitors like Kroger and stalling the Albertson's IPO that I said was too expensive anyway," the "Mad Money" host said.
And despite the reverberations that Cramer has felt, some of the actions that investors have taken recently seem wrong to him. For instance, there has been concern that apparel prices could go down. That was why retailers were hit so hard last week.
Cramer's not buying it.
The selling in stocks like Target was strange to the "Mad Money" host. Target has $8 billion in private label, in-house apparel brands that people like. So, why the heck would someone buy a brand that Wal-Mart makes instead?
More important, Target has a price match policy to match prices of competitors, including Wal-Mart. But that hasn't seemed to matter to shoppers who are a bit higher on the economic ladder and aren't as sensitive to prices.
"In other words, people aspire NOT to buy clothes at Wal-Mart; the numbers say they prefer Target," Cramer said. (Tweet this)
This is why Cramer recommended both Target and Kroger as a buy from the Wal-Mart fallout.
Cramer can always tell when Wall Street enters the heart of earnings season, because investors will tend to shoot first and ask questions later when they've gotten it all wrong.
"This market is littered with these mistakes," the "Mad Money" host said.
When Cramer first entered this industry, it was a much different ballgame. Journalists did not have as much of a rush to break earnings stories, in an attempt to match companies' reported sales and earnings numbers with consensus estimates.
Cramer explained that these days, multiple wire services will try to get ahead of the competition by scanning numbers in the release and then matching them against predetermined cheat-sheets to see if sales and earnings are better or worse than expected.
Once the comparison has been done, the journalist will then attempt to derive a reason from the release to try to explain why things might have been better or worse. Then, it's on to the next story.
This process happens all the time. But since this week is the biggest week of earnings announcements for the entire quarter, Cramer warned investors to be careful.
"People end up losing fortunes trading off of these slipshod bulletins that purport to describe what happened in a given quarter," Cramer said.
With the price of oil down huge and putting extra money into consumer pockets, Cramer would expect that now would be a good time for the theme park business. Not only do families have more money to spend, but it is cheaper for them to drive long distances to a theme park.
Six Flags is the largest regional theme park operator in the U.S., with 18 parks in North America. Its stock has been on a roller coaster recently but is still up more than 16 percent for the year and has a 4.25 percent yield.
The company just reported a solid quarter after the close on Monday and managed to beat even the most bullish forecast out there, thanks to a 9 percent increase in theme park attendance.
To learn more, Cramer spoke with Six Flags Chairman and CEO Jim Reid-Anderson.
"We think very little is gasoline, Jim. We think our approach to innovation in every park every year is driving the success that we are seeing," Reid-Anderson said.
For those investors looking for ideas, Cramer has found one activist investor out there who could light the way. Nelson Peltz is the one activist who Cramer says investors could piggyback after he announces his investment in a stock.
"Unfortunately, there is only one, because when these activists announce they have taken a position in a company, that stock tends to spike, which means that you will rarely ever be able to get shares at the same price as the hedge fund you are trying to follow," the "Mad Money" host said.
But when it comes to Trian Partners, the company Peltz runs, Cramer found that it is so good at helping companies unlock value, it's worth paying a Peltz premium for some of the companies that work with him.
That is why Cramer went through Peltz's portfolio to take a look at what holdings might be worth buying into in the current environment. Mondelez is a combination of many household brands that includes Oreos, Chips Ahoy, Triscuits and Ritz Crackers, among many more.
So, with the tremendous track record that Peltz has when it comes to creating value, Cramer sees a bright future ahead for Mondelez. He thinks Mondelez and Peltz can do a lot more, which is why he owns the stock in his charitable trust and recommended for investors to scoop up on any earnings related weakness.
Cramer has also seen signs of life in the tumultuous energy group. With the price of crude pulling back recently, he thinks some of the energy stocks could be ready to stabilize. Thus, the weakness in crude could provide a chance to buy some high quality oil-and-gas stocks at lower levels.
"I'm talking about Schlumberger, the largest and highest-quality oil service provider, which I like even though the company reported a quarter that was widely regarded as disappointing last Thursday night," Cramer said.
But now that the stock is absolutely hated, Cramer thinks it could be safe to circle back to it. Cramer knows from experience that one can only buy this stock when it is loathed, not loved, as wide-eyed optimism must be crushed before Schlumberger can find a bottom.
So, now that oil seems to be stabilizing in the $40s, and Schlumberger has rallied 7 percent since the end of the third quarter, Cramer thinks now is the right time to start building a position in the company.
In the Lightning Round, Cramer gave his take on a few caller-favorite stocks:
Cedar Fair L.P: "I really do like Cedar Fair. I happen to like Six Flags more because I think it's got a little better growth...But Cedar Fair has done really well. It's just that Six Flags has done even better."
Banco Santander: "I'm not happy with Santander. I think it should be doing better. The rest of Europe is coming back. I don't want to sell it at the bottom here because it is inexpensive. But boy they really have not done a great job, and I have to be candid about that. They really haven't."